Some Comments on the Class Foundations of the Occupation
by Danny Gutwein

The original Hebrew version of this article was published in Teoria ve-Bikoret [Theory and Criticism] 24 (2004): 203-211.


Two main processes have shaped the character of Israeli society in the past three decades: the privatization revolution and the perpetuation of the occupation.  The underlying interdependence of these two processes has comprised the political logic of the Israeli Right and informed its hegemony.  The gradual liquidation of the Israeli welfare state and the privatization and commercialization of its services have expanded the economic gaps and exacerbated the social inequality that hurt mainly the lower classes.  Thus, the liquidation of the welfare state has turned the occupation of the Palestinian Territories and its byproducts -- in particular the settlements and the split of the Israeli labor market -- into a compensatory mechanism that has protected the Israeli lower classes from the detrimental impact of privatization.  Privatization intensified the lower classes' bonds with the political Right, alienated them from the Left, and created the social and political basis for the perpetuation of the Occupation.  The practice and rhetoric of the Right have constantly blurred the causal relation between occupation and privatization and, coupled with the false separation between politics and society it became an essential part of the power relations that guaranteed the persistence of the hegemony of the Right.

Politically, exposing the causal relation between privatization and the Occupation should have been at the forefront of the Israeli Left's struggle against the hegemony of the Right.  However, despite its ongoing failure to enlist the support of the lower classes in its peace policy, the Left -- which represents mainly the middle classes -- not only abstained from exposing this relation, but it further blurred it by advancing an opposing casual explanation.  According to the Left, the Occupation has been the reason for the economic and social inequality; the obvious conclusion that the Left inferred from this inversion was that the struggle for social justice should be postponed until Israel withdraws from the Territories and peace will be achieved.  By this inversion, the Left has duplicated the false politics-society separation and used it to justify its neo-Liberal policies.

The Left has repeatedly argued that the lower classes' support for the Right and the Occupation is irrational -- the outcome of a plethora of ideological factors, such as religiosity and chauvinism -- and contradicts their interests.  It is the irrationality of this support, the Left has further maintained, that renders any attempt to fight it difficult.  The Left has adopted, then, an idealistic and patronizing interpretation, which denies the social and economic basis of the Right's hegemony, a basis whose undermining is a precondition for any political struggle against the Occupation.  It appears that more than positing the Occupation as a source of the social gaps in Israel, the Left used the Occupation as an excuse for affirming the economic inequality, which, in fact, reproduced the necessary prerequisite for the right-wing regime and the continued occupation of the Territories.  The Left's paradoxical support of the power structure that guarantees the consolidation and perpetuation of the Right's hegemony is inherent in the no less paradoxical support of the middle classes -- the backbone of the Left's champions -- of the privatization revolution, which thus emerges as a decisive factor in the perpetuation of the Occupation.

"The paradox of the Left" and additional aspects of the class foundations of the Occupation, will be discussed below, focusing on their relationship to the privatization revolution.  Obviously, the economic and social perspective proposed here highlights only part of the complex of factors that inform the continued Occupation.  Yet their persistent absence from academic and public discourse adversely affects the understanding of the phenomenon, not to mention the ability to challenge it.


The false separation between politics and society reflects the erosion of social responsibility on the part of the Left's mainly middle class supporters, following the loss of power to the Right in 1977.  The class logic that repeatedly produces this false separation had already been expressed in the slogan "Peace Now", which became the ethos of the Israeli Left.  The moral, almost religious fervor which the 'now' ethos instilled in the struggle for encouraging peace and stopping the settlements, only emphasized the middle classes' indifference to the growing economic inequality in Israel.  Thus, the 'now' ethos, based as it is on opposition between 'justice' and 'democracy,' exposed the contradiction between the pious rhetoric of the Left and the class-based interests of its voters.  The 'now' ethos has been further unveiled as a political defiance and cultural contempt on the part of the old hegemony, mainly of the labor movement, to the coalition of the 'others,' comprised mainly of the lower classes -- either the Mizrahi (Oriental) Jews or the ultra-orthodox -- who brought the Right to power in 1977.  More than anything the 'now' ethos disclosed the vain frustration of the old establishment: as they lost their control over Israeli politics, they were determined to keep their hegemonic status through an indirect strategy, that of circumventing politics.  This strategy would gradually adapt the Left to the privatization policy of the Right, which transferred power from politics and the state to the market and the professional establishments, where the middle classes still retained their power.

The other slogan of the Left -- "money for the slums, not for the settlements" -- ostensibly expresses an awareness of the causal relation between economic inequality and the perpetuation of the Occupation.  But, in fact, this slogan co-opts the politics-society relationship only to negate it, all the while revealing the class-based interests that reproduce and sustain the separation between the two.  Under the guise of concern for the weak, by this slogan the Left suggested a 'zero sum game' paradigm, which makes investment of money in poor neighborhoods conditional on the cessation of its flow to settlements, thus adopting the neo-Liberal logic that further increases inequality.

The emphasis the Left put on the Occupation and settlements, as the main factors hurting the lower classes, obscured the crucial role that the privatization revolution played in the increase of inequality and poverty.  This obfuscation, which erased the liquidation of the welfare state from the Israeli political discourse, helped the middle classes to set the necessary conscious conditions for fostering the privatization process.  The false separation between Occupation and privatization blurred the fact that they were merely two sides of the same policy.  Thus, this separation further concealed the only real alternative to both: a policy that simultaneously invests in the poor neighborhoods and struggles against settlements.  Such a policy, which would provide social security through a comprehensive and universal welfare state, would constitute the necessary preconditions for terminating the Occupation by eliminating the need of the lower classes -- the main reservoir of Right's supporters -- for the compensatory mechanism it supplied.

In the introduction to the edited collection of essays, Real- Time: the Al-Aqsa Intifada and the Israeli Left, Adi Ophir formulates the gist of the Left's traditional logic of "the Occupation first."  According to Ophir, the Occupation is "the starting point, the mold for power relations and social relations" in Israel (page 11); and its termination is the prerequisite for both peace and social justice.  Thus, the Left's support for any social issue, just and worthy as it is, like opposing privatization or the raising of the minimum wage, must be "conditional on its contribution to the struggle against the continuation of the Occupation" (page 18).  It seems, however, that the consecutive electoral failures of the Left suggest an alternative logic and diametrically opposite conclusion: in order to put an end to the Occupation, the social relations upon which it is based should be abolished first; in other words, postponing the struggle against economic inequality affirms, in fact, the very power relations that guarantee the continuation of the Occupation.


The settlements project in the Territories and the rapid growth of economic inequality in Israel have been complimentary foundations of the social and political power relations that the Right has constructed since 1977 to secure its hegemony.  Regarding the universal welfare state as one of the main sources of power of the Left, the Right has used Thatcher-like practices to liquidate the welfare state through privatization and commercialization of its services.  Naturally, this policy initially affected mainly the lower classes.  Accordingly, in order to offset the losses it inflicted on its voters, the Right has constituted a compensatory mechanism by splitting Israeli society into rival interest groups -- 'sectors' that were defined on the basis of ethnicity, religion or culture -- which has worked to undermine the universal welfare state and replace it as suppliers of partial substitutes to its gradually liquidated services.  This strategy stimulated the political institutionalization of the sectors, a process that has turned the Right, in fact, into a coalition of rival sectorial interest groups.  Commercialization and sectorialization are different facets of the privatization policy: in order to secure the much needed social services -- which were turned from civic right into commodities -- the lower classes were forced to 'sectorialize' themselves in an attempt to acquire, by their political power, those same services that they could not obtain by their purchasing power.  Sectorialization, in turn, undermined the foundations of the welfare state and further expanded the vacuum that has been filled by privatized services, and so forth.

The settlement project best exemplifies the essential interrelationship between privatization and sectorialization: while the universal welfare state was liquidated in pre-1967 Israel, an alternative sectorial welfare state was constructed in the Territories.  The enormous benefits, which the 'Land of Settlements' offers in housing, education, health, taxation, infrastructure and employment, have actually become a mechanism which compensated the lower classes for the damages inflicted upon them by the privatization of welfare services in Israel.  These benefits spurred, in fact, most of the migration to the Territories.  The migration to the 'Land of Settlements' offered the lower classes symbolic capital as well: inclusion into the new Israeli elite of the settlers.  The lower classes' political support of the Right, and their ideological identification with the settlement project, blurred the economic and social motives for their migration into the Territories.  The importance of the economic and social opportunities that the settlements opened up for the lower classes increased -- also for those who have not yet taken advantage of them -- as privatization of the welfare state exacerbated the inequality in Israel.  These opportunities erased the Green Line between Israel and the Territories even more than the political and religious idea of Greater Israel.  Economics rather than either ideology or politics informed the lower classes' hawkish views.  Given the conditions that were created by the privatization regime, and considering their deteriorating situation, the lower classes' support of the Right -- in contrast to the repeated complaints of the Left -- is totally 'rational': With the liquidation of the welfare state in Israel, the lower classes viewed the investment in settlements as an investment in them and their future.  As such, they rejected, as false, the opposition that the Left propped up, between the slums and the settlements.  The compensatory mechanism of the Occupation mitigated and concealed the detrimental effects of the cutbacks in social services, thereby, facilitating the promotion and intensification of the privatization revolution, as well as bolstering the lower classes' dependence on, and support of, the Right.  Thus, just as the Occupation created the settlements, privatization created the settlers.

The compensatory mechanism of the Occupation has influenced the ideologies of both the lower and middle classes.  Given the close relation between social status, ethnic origins and voting patterns in Israel, the lower classes considered the Left's attacks on the settlements as driven by social more than by political motives.  They deemed these attacks to be an attempt on the part of the middle classes to obstruct the opportunities which the Occupation provided them, to cope with the growing inequality and improve their economic and social status.  At the same time, as the middle classes' support of the privatization grew, identifying the settlements with state intervention helped the Israeli Left to renounce its historic commitment to the welfare state and gave them a 'moral' excuse to abandon all values of social solidarity and turn to neo-Liberalism.  The privatization of the welfare state turned the 'Land of Settlements' into the fantasy of the lower classes and, as the Green Line between Israel and the Territories gradually lost its politically significance, privatization imparted to it a new social meaning.

The Janus face of the Occupation, as a catalyst of the privatization revolution and a compensatory mechanism from the repercussions of the liquidation of the welfare state on the lower classes, was revealed in the labor market as well.  The Occupation exposed the lower classes to an unbeatable competition with Palestinian workers, whose advantage grew as they adapted to the demands of the Israeli labor market, all the while accepting wages lower than those the Israeli worker demanded.  This competition was later used as a whip to privatize the labor market and to break up organized labor in all branches of Israeli economy.  Under the privatization regime, the Occupation not only accelerated the breakup of organized labor but, moreover, it has gradually become a false alternative to unionism as defense for low-wage workers.  The frequent border closures, which prevented Palestinians from regular attendance in their workplaces and reduced their profitability, on one hand, and the fears of Jewish employers to hire Palestinian workers, on the other hand, constantly increased the competitive edge of Jewish workers.  The Occupation transformed the Jewishness of the lower classes from a religious or national identity into an economic asset: it granted the Jewish worker a structural political advantage over the Palestinian worker.  Maintaining this political advantage, which compensated for the economic inferiority of the Jewish worker, was conditioned on the continuation of the Occupation, and, thus, perpetuated the lower classes' support for the Right.  Conversely, the 'privatized peace,' championed by the Left -- which encompassed the 'New Middle East' with its abundant cheap labor -- would have hurt this political competitive advantage, and increased the lower classes' aversion to peace and their alienation from the Left.  The answer to this vicious circle lies in encouraging organized labor, thus undermining the role of the Occupation as a compensatory mechanism in the labor market, as well as in raising the education level and the employment abilities of the lower classes.  This solution, however, contradicts both the ideological and business-oriented support by the middle classes and the Left, for the privatization of the labor market and the education system.

The interrelationship between the Occupation, privatization, the labor market, and Jewishness was a key factor in the rise of Shas, a sectorial party that appeal mainly to the Mizrahi religious lower classes.  The widespread support Shas received in the ballots can not be explained -- as suggested by most commentators -- primarily by the limited social services it supplies.  The position of its supporters in the labor market, and mainly with respect to competition with Palestinians and foreign workers, points to another facet of this support: Shas identified the economic advantage that Jewishness provided the lower classes.  Accordingly, it rendered Jewishness, under the guise of Mizrahi ultra-orthodoxy, into symbolic capital, and translated this sectorial trademark into political power.  Thus, Shas grew out of the interaction between the Occupation and sectorialization, which increasingly merged into one another as a defense and compensatory mechanism for the lower classes, subsequent to the liquidation of the welfare state and the privatization of its services.  This, in turn, gradually transformed the ideology of Shas, which became increasingly hawkish, with the growing dependence of its supporters on the compensatory mechanism of the Occupation.


The Left actively participated in establishing the privatization regime, which created the social and political conditions for the continued Occupation.  When it became clear to the middle class voters of the Left that the lower classes' support of the Right secures its power and hegemony for the foreseeable future, they adopted privatization as a strategy to preserve their class privileges by circumventing politics.  Privatization transferred economic and social control from the state to the market and the professional establishments, in which the middle classes retained their hegemony and through which they believed they could maintain their privileges.  The class interest of its voters had, thus, driven the Left to endorse the logic of privatization, and, as a part of it -- in clear contradiction with its discourse of peace -- adopted the practice of the compensatory mechanism of the Occupation.  The nexus of privatization and the Occupation became the platform for establishing the regime of governments of national unity, and this nexus repeatedly revealed itself in the policies of Left governments.

The Left conducted the peace process at the same time it deepened the Occupation; while the separation between politics and society was reproduced in the unification of 'peace' and 'occupation.'  Thus, the Left allowed the middle classes to reap the profits of peace without compromising the compensatory mechanism of the Occupation, whose importance grew the more the privatization revolution increased the injurious inequality that the lower classes bore.  Prime ministers Yitzhak Rabin and Ehud Barak acknowledged the relationship between the widening economic gap and the growing support for the Right.  But, as representatives of the middle classes, both Rabin and Barak did not curb the privatization revolution; rather, they intensified it.  Rabin's government signed the Oslo agreement in order to put an end to the Occupation, but during his premiership, the number of settlements continued to grow.  This contradiction can be explained by another aspect of the agenda of Rabin's government: the deepening privatization of social services, and, in particular, that of education, health and labor.  For example, with the support of Rabin, the Histadrut, Israel's General Federation of Labor (founded in 1923), was fundamentally undermined.  The weakening of the trade unions facilitated the privatization of the labor market, which increased the competitive edge of the unorganized Palestinian worker, and, thereby, strengthened the role of the Occupation as an alternative to unionism in defending the low-wage Jewish worker . The Left also allowed the continued development of settlements by postponing discussion on their future to the 'final status' agreement.  While these actions contradicted the declared peace policy of the Left governments, they served well their privatization policy, which ensured that "the Land of Settlements" would continue to function as an alternative welfare state.  The more privatization hurt the lower classes -- whose support in its 'peace policy' the Left tried in vain to acquire -- the larger a role that the compensatory mechanism of the Occupation played, a role which paradoxically informed the Left's 'peace policy.'  This paradox explains a dichotomy typical of the Oslo agreement.  Lacking sufficient public and electoral support for its peace policy, the Left created an equation, according to which withdrawal from some of the Territories allowed for the continued direct or indirect occupation of other parts of the Territories -- a formula which the Right gradually, and in different ways, accepted.

Privatization is, therefore, the pattern of social relations that sustains the Occupation.  The 'privatized peace' of the Left has deepened economic inequality, which fit well with the self-interest of the middle classes and strengthened the Occupation as a compensatory system for the lower classes.  The mutual support of privatization by the Left and the Right was reproduced as a merger of peace and the Occupation, and its underlying logic was unveiled in the policy of "disengagement."  Accordingly, the failure of the Israeli Left in the past three decades originated in the contradiction between its professed policies and the agenda of his middle class voters.  The false interests of the middle classes in intensifying the privatization revolution that hurt the lower classes, gradually turned the Left into a partner in perpetuating the Occupation.  Thus, the Left has transformed 'peace' from a political program to a cultural identity and a ritual of purification that ratifies both privatization and the Occupation.  With the rejection of the struggle for social and economic equality, the Left has ceased being a viable alternative to the Right, whose hegemony has become strengthened as the compensatory mechanism of the Occupation has replaced the welfare state.  Gradually, the Left has ceased representing the interests of the middle classes as well, and has increasingly lost its appeal to them.  Privatization has undermined the social security of large segments within the middle classes.  These déclassé groups have exchanged 'the privatized peace' for 'a politics of hatred,' that, as a sectorial identity, was assimilated in the Right and intensified the power structure that perpetuated its hegemony.


The Occupation is a continuation of the privatization and serves as a compensatory mechanism enabling the further deepening of privatization.  This interrelationship is not particular to Israel, but it reconstructs the typical modus operandi of imperialism.  Thus, for example, Radical criticism described British imperialism as a structure of power, designed, for one, to guarantee the interests of the landed aristocracy and financial bourgeoisie, and, two, to protect their hegemony by neutralizing the industrialists' and proletariat's opposition to their policies by means of sectorial advantages they garnered from the imperial market.  Advocates of decolonization concluded from this analysis that the struggle against imperialism must focus not only on its political aspects, that is to say, the ongoing colonial rule, but on its role as an economic compensatory mechanism for different groups within British society.  Indeed, the struggles in Britain for liquidation of the empire -- especially, in Ireland at the beginning of the twentieth century and in India in the second half -- were accompanied by the establishment of the British welfare state as an alternative to imperialism and its compensatory mechanism.

The Israeli Left rejected the British, and in fact the European, historical experience of decolonization, which regarded the introduction of the welfare state as a central means for annulling the compensatory mechanism of imperialism and for enlisting political support in the struggle for liquidating the colonial empires.  On the contrary, the Left directed its criticism at the Israeli welfare state, portraying it as essential part of the oppressive mechanism of Zionism and the labor movement, while depicting the market and privatization as liberating factors.  Thus, despite its open and firm opposition to the Occupation, in practice, the Left has supported the very economic and social bases which allowed for the continuation of the Occupation.  This paradox is evident mainly among the more radical elements of the Left, who have adopted the cultural theory of postcolonialism but rejected the economic and social policies of decolonization.

The rejection of the historical experience of decolonization fit well with the interests of the middle classes in furthering the privatization policy, which, in turn, made the Left a partner to the perpetuation of the Occupation.  Thus, the solution to the 'paradox of the Left' lies precisely in adopting the experience of decolonization, and mainly the liquidation of those economic and social conditions that comprise the basis of the Occupation.  Applying the experience of decolonization means a radical change in the priorities of the Left, principally by adopting a policy of "welfare in exchange for territories."  That is to say, providing social security to the lower and middle classes through economic regulation, just distribution and social equality in the framework of a universal welfare state that will bridge the social and economic gaps.  Such a welfare state would break the vicious circle of privatization, occupation and support for the Right, as well as create the political conditions for the struggle for a likely withdrawal from the territories and the end of the Occupation.

News from Within Danny Gutwein is a professor in the Department of Jewish History at the University of Haifa.  This article first appeared in English in News from Within 22.4 (April 2006), published by the Alternative Information Center.  Also available from the same issue are Bryan Atinsky, "An Interview with Professor Tanya Reinhart"; Michael Warschawski, "Israeli Elections: A Drive to Normality and Separation"; Sergio Yahni, "The Burden of Forming a Coalition"; Shir Hever, "Economy and Politics: The Policy of Poverty in Israel and the Occupied Territories"; Nassar Ibrahim, "The Jericho Prison Raid: A Tragedy or a Farce?"; Hunaida Ghanem, "The Politics of Thanatos: Life and Death Under the Shadow of Occupation"; Mahmoud al-Ali, "The Loss of Unity Among Palestinian Refugees in Lebanon"; and Ilan Pappe, "Passage to the ‘Other Side’ of Israel."

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